The Korea Exchange (KRX) drew more than 1.8 trillion won in turnover on the 14th, the first day of its new after-market session. The figure was roughly on par with that of Nextrade (NXT), which operated during the same hours, signaling that competition between the two bourses over after-hours trading has begun in earnest from day one.
Turnover in the KRX after-market, which ran from 4 p.m. to 8 p.m., totaled 1.8177 trillion won on volume of 72.24 million shares, according to the exchange's information data system. That amounted to 8.03% of the 25.8082 trillion won traded on the KRX main session and 7.04% of its 900.05 million shares in volume.
By market, securities listed on the KOSPI market accounted for 22.18 million shares and 1.3252 trillion won. KOSDAQ stocks saw volume of 50.06 million shares and turnover of 492.5 billion won. While KOSDAQ shares changed hands in greater numbers, turnover was larger on the KOSPI market, home to most of the country's largest companies by market capitalization.
The NXT after-market, open from 3:40 p.m. to 8 p.m. the same day, handled 12.17 million shares worth 1.7896 trillion won. On turnover alone, the gap between KRX and NXT came to just 28.1 billion won. The two exchanges effectively split the real-time after-hours market, which NXT had operated virtually alone through the previous trading day, at comparable scale from the outset.
The outcome is attributed to brokerages' smart order routing (SOR) systems, which automatically distributed orders to whichever of the two venues offered better terms for investors. Under the setup, SOR compares prices, fees, order size and the likelihood of execution before sending an order to either KRX or NXT, even when investors do not select an exchange themselves.
Combined turnover across the domestic stock market that day, including the KRX main session and both after-market sessions, reached 37.5583 trillion won on volume of 1.05776 billion shares. The KRX after-market accounted for 4.84% of total turnover, with the NXT after-market at 4.76%.
The number of stocks investors can trade after the close has also risen sharply. NXT had kept its tradable list at around 600 names because a presidential decree under the Financial Investment Services and Capital Markets Act caps its average daily volume at 15% of KRX volume. With KRX now entering the after-hours market, real-time trading has expanded to cover most KOSPI and KOSDAQ stocks.
Brokerage participation is broad as well. Close to 40 of the roughly 50 brokerages that are KRX members, including foreign firms, have said they intend to take part in the after-market. Analysts expect trading liquidity in the session to grow if more brokerages join and orders accumulate sufficiently.
The longer trading hours allow investors to reflect corporate disclosures released after the main session, as well as moves in overseas markets, in share prices the same day. Improved access for foreign investors in different time zones is another expected benefit.
Market participants see the launch of the KRX after-market as more than an extension of trading hours, viewing it as a turning point toward a longer-hours trading regime for the domestic stock market. Competition with NXT widens investors' choice of venue while allowing the market to respond to the global trend of major exchanges lengthening their sessions.
"With competition to attract liquidity intensifying as major U.S. exchanges including Nasdaq launch 23-hour trading later this year, we have put in place the minimum infrastructure our capital market needs to compete with overseas markets," said Song Ki-myung, vice chairman of the Korea Exchange.
